The U.S. administration has shocked the world by imposing its so-called "reciprocal tariffs" on approximately 90 countries. It should take a lesson from the Smoot-Hawley Act – tariffs will not "make America great again." Li Jiaming reports.

LI JIAMING CGTN Reporter "The U.S. administration has shocked the world by levying so-called 'reciprocal tariffs' on about 90 countries. But this will not make America great again. Here is why."

If we take a look back at history, it is easy to see that this is not the first time tariffs have been weaponized by the U.S. to advance its interests. In the 1920s, the U.S. experienced a period of industrial growth thanks to electrification, known as the "Roaring Twenties."

But much of its profit was invested in the stock market. Banks were subjected to little supervision, and the prevailing narrative was that of the "free market."

Then, when the stock market bubble burst on October 29, 1929, an economic tsunami in the U.S. began, characterized by poverty, unemployment, and a sharp decline in industrial production. This was later known as the Great Depression.

In late 1929, as the global economy entered the first stages of the Great Depression, the main goal of the U.S. was to protect jobs and farmers from foreign competition.

Two U.S. politicians – Reed Smoot and Willis C. Hawley – proposed raising tariffs on over 20,000 imported goods, in an effort to shield American industries. This became known as the Smoot–Hawley Tariff Act.

Instead the Depression deepened, as the U.S.'s trading partners retaliated with tariffs of their own, leading to a plunge in U.S. exports and global trade.

By September 1929, the U.S. administration had received protest notes from 23 trading partners, but threats of retaliatory action were ignored. As a result, U.S. imports decreased by 66 percent from 1929 to 1933, and exports dropped by 61 percent.

The Act was intended to protect American jobs. But unemployment rate was eight percent in 1930 when the Smoot–Hawley Act was passed but jumped to 16 percent in 1931, and to 25 percent in 1932–1933.

LI JIAMING CGTN Reporter "Let me end by reminding you of what President Ronald Reagan said in 1987 about tariffs. His words still echo today."